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The Advocate General’s opinion published this morning endorses the orthodox understanding of the trigger point for the obligation to consult collectively: ie that the numerical thresholds are calculated for each “establishment” separately. If adopted by the European Court of Justice, that will put paid to arguments that in the case of large-scale re-organisations, redundancies declared across the employer’s entire operation need to be aggregated.

The opinion has been given in relation to three separate cases, one of which is a reference from the Court of Appeal in the so-called “Woolies litigation”. The underlying issue in that case is whether, after the closure of the national chain of Woolworths stores, protective awards should be confined to workers at the larger stores, or whether all staff being made redundant as part of the same redundancy programme should qualify, even if the store where they were working employed fewer than 20 staff.

The Collective Redundancies Directive gives member states a choice of how to implement protection for collective redundancies. The first option applies different numerical thresholds depending on the number of employees at the establishment in question. The second – adopted by the UK government – creates an absolute threshold of 20 “whatever the number of workers normally employed at the establishments in question”.

The Advocate General’s view is that “establishment” must mean the same in both limbs. It just happens that the two most important cases from the ECJ have been decided under the first limb. But in all cases establishment essentially means the “local employment unit”. The fact that the plural form is used in the second limb is not significant – indeed the singular is used in a number of other language versions of the Directive.

If this reasoning finds favour with the ECJ, it will make it that much easier for the Court of Appeal to overturn the EAT’s controversial ruling 18 months ago which has been worrying employers ever since. It will also be a relief to the UK government, since the bill it will have to pick up for unpaid protective awards in this and other similar cases will be that much smaller.

Compare jurisdictions: Employment & Labor: North America

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